888 Resolves Middle East VIP Investigation with £3 Million Gibraltar Settlement

In a recent development, 888’s subsidiary, Virtual Global Digital Services Ltd, reached a settlement deal with the Gibraltar Gambling Commissioner worth £2.9 million (€3.4 million/$3.7 million). This agreement is the result of a succession of VIP-related problems in the Middle East. The Commissioner found various weaknesses in 888’s previous compliance strategy, emphasizing the significance of rigorous Know Your Customer (KYC) processes and anti-money laundering (AML) standards.

The Gibraltar Gambling Commissioner’s detailed investigation revealed a wide range of deficiencies in 888’s compliance measures. In particular, poor KYC procedures that failed to consistently capture and validate address facts for certain cases were revealed. Furthermore, the corporation relied largely on high criteria for enhanced due diligence (EDD) measures, which created uncertainty in their implementation. This mismatch extended beyond the effectiveness of EDD checks, necessitating a review.

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A lack of uniformity in managing customer accounts with restrictions versus closure was also highlighted. This inconsistency raised concerns over maintaining a balanced approach when overseeing customer activities. Furthermore, 888’s heavy reliance on open-source checks drew attention, overshadowing the necessity of obtaining essential documents like source of funds and source of wealth records from customers.

Earlier this year, the spotlight shone on 888 when the operator of William Hill suspended Middle East VIP operations, pending an internal compliance investigation. The scrutiny uncovered deviations from best practices in KYC and AML procedures for the company’s VIP clients in the region. Consequently, the CEO of 888’s parent group, Itai Pazner, stepped down from his role.

Although the case centered around Middle Eastern activities, its implications resonated across 888’s global operations. Aligning with the Gibraltar Commissioner’s findings, the company engaged in introspection and revamp. Recognizing the need for preemptive measures, 888 promptly introduced new policies and procedures to avert any recurrence of similar issues. The discernment of risks was upgraded in tandem with a thorough assessment of pertinent accounts.

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Deliberating on the case, the Commissioner considered multiple facets. 888’s proactive stance in acknowledging the issue and suspending affected accounts, combined with an internal compliance review, garnered the regulator’s recognition. The swift enhancements to systems and controls in the aftermath of this incident also bolstered the company’s standing. Importantly, no instances of 888 being involved in handling proceeds of crime or terrorist financing were discovered.

In lieu of monetary penalties, the Gibraltar Gambling Commissioner reached an agreement with 888’s subsidiary, resulting in a £2.9 million settlement. As part of this resolution, a portion of the sum will be directed to the Centre of Excellence for Responsible Gaming at the University of Gibraltar, reflecting a commitment to responsible gambling practices.

The Commissioner emphasized the significance of this case for Gibraltar’s licensees, urging them to incorporate the lessons learned into their own risk assessments, systems, and controls. Assuring the community, the Commissioner confirmed that 888 remains a reputable entity to hold licenses in Gibraltar, having diligently enhanced its policies and rectified the historical shortcomings.

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